In an effort to assist residents facing severe hardship, the Massachusetts Attorney General issued new regulations on March 27, 2020 restricting consumer debt collections. The coronavirus pandemic and resultant economic fallout are bad enough; now the Commonwealth’s efforts to protect consumers and their homes have imposed an additional, unintended burden on condominium associations.
While the intention was noble, the regulations’ broad reach falls heavily on condominium associations, many of which are struggling with the unanticipated costs of dealing with the unprecedented challenges presented by the COVID-19 pandemic. As we turn a new month, and delinquencies increase and age, prudent cash-flow planning requires understanding these restrictions.
The new Unfair and Deceptive Debt Collection Practices During the State of Emergency Caused by COVID-19 regulations, which were immediately effective upon their announcement, are intended to protect consumers from unfair and deceptive practices by creditors and debt collectors. They will remain in place until June 25, 2020, or the end of the State of Emergency -- whichever comes first.
The regulations restrict condominium associations, property managers and their attorneys from taking action to collect outstanding condominium common area expense assessments. They also prohibit the initiation, filing or threatening to file of any new “collection lawsuit,” defined as“any legal proceeding, including…civil actions, statements of small claims and supplementary process actions, commenced in any court for the purpose of collecting any debt or other past due balance owed or alleged to be owed.” Further, the regulations do not allow a creditor or debt collector to “initiate, threaten to initiate, or act upon any legal or equitable remedy for the seizure [or] attachment…of…property…for the payment of a debt to a creditor.”
It is strongly recommended that no new complaint to collect unpaid condominium common expenses be filed while these emergency regulations are in place, and that any pending collection actions be put on hold. Condominium associations, property managers and their attorneys should also refrain from sending notices that threaten legal action for failure to pay any past due assessment. Although regular monthly invoices may continue to be sent, they should not contain any language that threatens action to collect any unpaid assessment.